Simulation of Sales Promotions towards Buying Behavior Essay Example for Free

Simulation of Sales Promotions towards Buying Behavior Essay Abstract The purpose of this study was to examine the influence of sales promotion on buying behavior among university students. Specifically, Kongunadu Arts and Science College was chosen as study location. The research data was collected from 171 respondents. The data were collected using self-administrated questionnaires. This study found that there was no significant difference between gender and buying behavior (t = -1.003, p 0.05). There were significant relationship between attitude towards price discounts (r = 0. 372, p 0.01), coupons (r = 0.270, p 0.01), free samples (r = 0.256, p 0.01) and buy-one-get-one-free (r = 0.338, p 0.01) with buying behavior. Results of Hierarchical Multiple Regression found that of the four variables, price discount (ß = 0.256) was more influential that of buy-one-get-one free (ß = 0.183), coupon discounts (ß = 0.014) and free samples (ß = 0.040). The findings of this study would help marketers to understand the types of promotion that significantly influence buying behaviour of the respondents. Hence, this could help marketers in their marketing planning to become more competitive and gain profit. Keywords: Sales promotion. Buying behavior. University students 1. Background of Study Many purchase situations are so habitual that consumers conduct very little cognitive activity (Wathieu Murre, 2007). In such cases, it is hard to motivate behaviors such as brand svwtching or increases in the number of units purchased. One of the advantages of promotions is that they can stimulate consumers to think and evaluate brands and purchase possibilities when they otherwise may not have. Therefore, many marketers and retailers utilize different kinds of promotion tools and strategies in order to understand the preference of consumers and boost their sales. Normally, sales may attract more customers spend their money, make consumption and purchase the products they wish during this super save period as the they believed that during the sales promotion, prices of all products are cheaper than usual. This phenomenon shows that some of the consumers are easily tempted when they see the word of sales promotion. Other than price reductions, coupon or rebate given by the retailer and other promotional tools like free sample, bonus pack and buy one get one free were found to be inducing consumer buy more than they expect (Gilbert, 1999). What are more crucial now are consumers themselves not aware the influence of sales promotion on their buying behaviour and especially little is understood about their responds to the various promotional strategies practice by marketers. This will eventually lead to over-consuming and buy the products which are not necessary and useless. 2. Purpose and Significant of Study Research on marketing tools is indeed important to understand the most influencing tools to compete with competitors. Through this information, marketers and retailers could well plan their resources to gain the maxiirium profit. Thus this study aim to investigate the preference of consumer on different promotional tools, marketers and retailers will able to aware of the consumer behavior so that they can utilize the right and th most effective promotion technique to attract customers. From the consumer perspective, this study will reveal the consumer attitude toward sales promotion and thus raise the awareness of consumers about their behavior that influenced by sales promotion. It also presents better understanding and information to consumers where their purchase behavior will be affected differently due to different type of promotional tools. 3. Literature Review Promotion is one of the techniques to attract consumers to purchase more or try a product or service. Severe outcomes of promotion included sales increased, quantify of stock used and attract new consumers. For example, price promotion refers to temporary price reduction which offers to consumers. The characteristic is the retailer would label a specific percentage or cash saving for the products or services. Previous studies indicated that a sudden increase of sales would experience by retailers because of price-conscious of consumers (Banks Moorthy, 1999; Kopalle Mela, 1999; Smith Sinha, 2000; Gilbert Jackaria, 2002). According to Blackwell, Miniard and Engel (2001), price discounts played significant roles in influencing consumer product trial behavior by which indirectly attract new consumer. In term of coupon promotions, those consumers obtained coupon are entitled to get discount of the products at its brighial price (Ndubisi Chew, 2006). Previous study found that coupon promotions do not have significant effect on volume of product purchase by consumer (Gilbert Jackarias, 2002). Later, a study conducted by Ndubisi and Chew (2006) at Malaysia has re-affirmed the statement by Gilbert and Jackarias (2002). They also reported that coupon promotion was among the least used and unpopular promotional tools by consumers. However, the results in Dotsons (2001) research proved that women report being more likely to use only coupons than men (p 0.05) and the youngest age group (less than 25 years old) reports a higher possibilify of taking advantage of bonus packs (p 0.05), price deals (p 0.05) and samples (p 0.05) than the age group of 35 to 54 respectively. According to Kardes (1999), marketing managers aware of product trial related to behavioral experience of consumers towards a product. Thus, sending free sample take place in promotional tools. Free samples refers to consumers are giving a free small sample of the product so that consumers have the chance to try and use the product. Shimp (2003) reported that a free sample had influence on consumers buying behavior while Gilbert and Jackaria (2002) have shown otherwise. Free sample was positively related to immediate sales of that particular (Lammers, 1991). Promotion technique of buy-one-get-one-free is one of the types of bonus packs in which the consumers are offered the additional product at the ordinary price but are in an enhanced package. Consumer would be easily persuaded to buy products as there is no extra cost need and more valuable perceived by consumers (Sinha Smith, 2000). Besides, this promotion technique would beneficial to retailers in speed up the stock clearance compared to price promotions (Li, Sun Wang, 2007). Relating with buying behavior, consumers usually have endless demand to ftilfiU their needs and satisfaction to obtain something new or better as every individual has their own behavior, attitude and thought while choosing products, services and making purchase decision. Consequently, there is a large body of literattire, which has examined consumers buying behavior and the studies have reported that many factor would infiuence consumer behavior whether buy or not to buy a product. According to Smelser and Baltes (2001), most of the daily life activities dominated by buying goods behavior and also experience which gained from the place such as shopping centers, cify centre, shops, recreational park, tourism centre and so on, where some stimulation radius can be stimulated. William (2002) revealed that social class has significant determination on purchase evaluation criteria. Attitude formation, motivation, value orientation, income, socialization during childhood and education levels will influence ones social class. According to Yip (2003), social class of an individual indirectly shows that low income would cause limited choice when making purchase decisions. High purchasing power, sales person and sales circumstances was among three key factors which influenced impulsive clothes buying practice among women consumer (Naimah Tan, 1999). 4. Methodology For the convinence of the researchers Kongunadu College of Arts and Science was selected as location of study. The data collection process was conducted among the students with prior permission from the department. Even though this small sample might not able to representative of all the population, it is considered as appropriate sampling because of using a relatively homogeneous group and this is helpful to minimize random error that might occur in using a heterogeneous sample such as the general public (Calder, Philips Tybout, 1981). Pilot study had been done before the actual study take place. The purpose of pilot study was to assess the reliability of the instruments that used in actual study. For this research, the pilot test had involved a total of 25 students in order to ensure that the question were understandable by the actual respondents. In addition, pre-test allowed the researcher to improve confidence and to make sure that the items that existed in questionnaire was suiting the studys requirement. 4.1 Instrumentation The present study used the questionnaire as the instrument of the study. The questionnaire was divided into three parts that were background of the respondents, the respondents attitude and perception with regards to different promotional tools and buying behaviour of respondents. In first part of questionnaire, each respondent was asked to answer both open-ended and close-ended questions. Open-ended questions allowed respondents to generate an answer without limitations such as age and family monthly income. On the other hand, close-ended questions required respondents to select from a set of answer already provided such as gender and race. Second part of the questionnaire was consisted of thirty two items where each different promotional tool was measured using eight items. The items developed to determine respondents attitude towards different promotional tools. There were four different promotional tools tested (i.e., price discounts, coupons, free samples and buy-one-get-one-fre e). Respondents were required to give a respond on a four point ordinal scale (strongly disagree, disagree, agree, strongly agree). The last of the questionnaire was also used four points ordinal scale (strongly disagree, disagree, agree, strongly agree) where there were thirteen items measuring the consumers buying behaviour, adopted from Bakeweà ¼ and Mitchell study. In the addition, the responses are given from one point in one end to four points in the other end. The Statistical Package for Social Science (SPSS) version 16.0 was used to analyze data. For analytical purposes, each scale of the total attitude score (price discounts, coupon discount, free samples and buy-one-get-one-free approach) were categorized into two categorized, solely based on the mean score of each measurement. The reliability for attitude towards price discounts scale was 0.752 while the reliabiliy of attitude towards coupons scale was 0.827. Furthermore, the reliability for attitude towards free samples scale was 0.862 and the reliabiliy for attitude towards buy-one-get-one-free scale was 0.806. Buying behaviour scale had achieved reliability of 0.680. These five instruments had achieved acceptable reliability for business and social science research. 5. Research Finding and Discussion 5.1 Attitude towards Price Discounts Table 1 demonstrates that more than half of the respondents agree that they prefer brands which offer price discounts, but more than half of the respondents prefer their favourite brands than brands which offer price discounts. This study also interested in indentifying about the category of attitude towards price discounts. The scale of the total attitude towards price discounts was then categorized into two equal groups. Respondents who scored above the mean scale (2.56 points) were categorized as having favourable attitude towards price discounts and respondents who scored below of the mean scale were categorized as having unfavourable attitude towards price discounts. Table 1 showed that less than half of the respondents (40.4%) had unfavourable attitude towards price discounts, where as there were 69.0% of the respondents have favourable attitude towards price discounts. 5.2 Attitude towards Coupons Table 1 indicated that the first statement was agreed by most of the respondents which were 53.2%. They acknowledged that a brand offers coupon would be a reason for them to buy. The respondents feel that a brand which offers coupon doesn’t give them a good buy (56.1%). Respondents do not give priority for the brands which offers coupon and they prefer their regular and favourite brands more. The data in Table 3 showed that the score of total attitude towards coupons of the respondents in range of lower than 2.44 points which were 49.7% of the respondents have unfavourable attitude towards coupons. On the other hand, there was 50.3% of the respondents have favourable attitude towards coupons. This indicated that exactly half of the respondents have positive attitude towards coupons promotion in this research. 5.3 Attitude towards Free Samples According to Table 1, exactly half of the respondents agreed that when they buy a brand that offers free samples, they feel they are getting a good buy (51.4%) and free sample has allowed them to buy more quantities of the same product. Moreover, half of the respondents prefer to buy the same brand even if they have free samples on other brands. However, Shimp (2003) reported that free sample had influence on consumers buying behaviour. As presented by Table 3, the scale of the total attitude towards free samples score cut point for two equal groups was 2.46 points which mean the group who scored higher than the mean scale of 2.46 has favourable attitude towards free samples and respondents who scored below of the mean scale were classified as having unfavourable attitude towards free samples. Based on Table 3, it proved that majority of the respondents (55.6%) have favourable attitude towards free samples while there were 44.4% of the respondents have unfavourable attitude towards free samples. This showed that there were 95 respondents (55.6%) out of the 171 respondents willing to consume more during the sales promotion with free samples technique. 5.4 Attitude towards Buy-One-Get-One-Free Table 1 illustrated the respondents in this study have agreed perception on all of the eight statements related to buy-one-get-one-free promotion tool. It showed that the percentage of the respondents who agreed on the statements was more or higher than respondents who disagreed on it. For example, 62.6 of the respondents agreed that a brand offers buy-one-get-one-free could be a reason for them to buy. Based on Table 1, it presented the scale of the attitude towards buy-one-get-one-free cut point for two equal groups were 2.6 points. Respondents who scored below the mean scale ( 2.6 points) of the attitude towards buy-one-get-one-free were categorized as having unfavourable attitude where as respondents who scored above the mean scale (2.6 points) were categorized as having favourable attitude towards buy-one-get-one-free. In Table 3, there were 48% of the respondents who have unfavourable attitude towards buy-one-get-one-free while 52% of the respondents have favourable attitude to wards buy-one get-one-free. 5.5 Respondents Buying Behaviour According to Brown (2007), buying behaviour refers to the decision processes and acts of people involved in buying and using products. There were total of 13 statements used to examine the respondents buying behaviour. The responses were scored by four point ordinal scale. Table 2 indicated the descriptive analysis of each question for buying behaviour. The analysis had been divided into two levels of buying behaviour: agree and disagree. From Table 2, it showed that majority of the respondents (80.7%) agreed in general, they try to get the best overall quality and 81.8% of them agreed they look very carefully to find the best value for money. More to the point, there were 71.9% of respondents agreed once they find the product they like, they will buy it regularly and 81.3% of them would carefully watch how much they spend. Among the 13 statements, the statement of I normally shop quickly, buying the first product or brand I find that seems good enough agreed by most least respondent s which were 56.8% of respondents. The results of buying behaviour level as shown in Table 3. Equal range was used to categorize the buying behaviour that is low and high level Respondents who under 2.87 points and above were categorized as having high levels of buying behaviour and vice versa. There were 49.7% of respondents in category of low level buying behaviour and 50.3% of respondents have high level of buying behaviour. The respondents, who have high level of buying behaviour normally, have high level of involvement where they are paying more attention towards sales promotion (Raaij et al, 2001). The result of Independent Samples T-test showed that there was no significant difference between buying behaviour and gender (t = -1.003, p 0.05). It was consistent with previous study by Chu (2006). However, the mean score of buying behaviour of male (M = 2.8390) respondents is slightly lower than female respondents (M =2.9059). 5.6 The relationship between the selected variables and buying behaviour The result of Pearson Correlation test revealed that there was a significant relationship between attitude towards price discounts and buying behaviour among respondents (r = 0.372, p ≠¤ 0.001) (refer to Table 4). The results of this study reaffirmed that findings of previous study by. Blackwell, Miniard and Engel (2001) that price discounts play significant roles in influencing consumers purchase trial behaviour, and Smith and Sinha (2000), price promotions can induced consumers buying behaviour and result in a short term increases in sales. There was a significant relationship between attitude towards coupons and buying behaviour (r = 0.270, p≠¤ 0.001). The result of this study was inconsistent with previous study in Kota Kinabalu, Malaysia which found that coupons have no significant relationship on product trial ptu-chase (Ndubisi Chew, 2006). This may caused by locality difference. This study also found that, there was a significant relationship between attitude towards free samples and buying behaviour (r = 0.256, p ≠¤ 0.001). The result is consistent with Shimp (2003) that a free sample had influence on consumers buying behaviour. Besides, Lammers (1991) also verified that free samples did have a positive impact on immediate sales of the product. Lastly, there was a significant relationship between attitude towards buy-one-get-one-free and buying behaviour (r = 0.338, p ≠¤ 0.001). It showed that the promotion tools with buy-one-get-one-free did attract and induce consumers favourable attitude on buying behaviour. Table 5 summarizes results of a multiple regression analyses of the buying behaviour. All the four selected variables namely: price discounts, coupons, free samples and buy-one-get-one-free which significantly related to buying behaviour was regressed using hierarchical method. Model 1 was used to in interpreting the buying behaviour of the respondents. Of the four variables, price discount (ß = 0.256) was more influential that of buy-one-get-one free (ß = 0.183), coupon discounts (ß = 0.014) and free samples (ß = 0.040). 6. Implications, Recommendations and Conclusions 6.1 Implications Every consumer has their own personal characteristic especially in choosing and making purchase decision. With the growing number of sales promotion, it is important to determine the consumers perception towards their buying behaviour. Besides, this study also examines several factors which included socio-demographic background (gender) and attitude towards four different promotional tools on buying behaviour. From the findings, it was noticed that consumers respond positively to the various promotional tools that is promoted by the marketers. It is because consumers are believed that during the sales promotion, prices of all products are cheaper than usual and they felt they are getting a good buy. It meant that the more positive or favourable the attitude towards promotional tools, the more increasing possibility consumers make purchase decision during sales promotion. Gender was found to have no significant difference on buying behaviour. The results of this study have several implications that would be beneficial to marketers, consumers and future research. From the marketers perspective, they can have a better understanding of UPM students buying behaviour so that they can better predict the wants and needs of potential consumers. The information derived from this research enable marketers to aware of the consumer behaviour. It will help them utilize the right and the most effective promotion technique to attract customers. Moreover, the study from Ndubisi and Chew (2006) also supported that by offering the right promotional tools, it can help organizations carefully plan their promotional strategies by giving preference to the more effective tools. It is vital because the precise marketing strategies decision assists the company to minimize cost and maximize their profit. In addition, the current research made consumers more aware of their easily influence behaviour to sales promotion because it present better understanding and information to consumers where they respond differently due to different type of promotional tools. The research also created consumer awareness to make careful analysis before they decide to buy products and services. Hence, the consumers will realize the importance of understanding the changing environment and update themselves from time to time (Hang, 2008). Finally, consumers were benefited through this study and becoming smarter day by day. This study was also useful to academicians where current study could serve as a reference and may provide some guides for researchers who would like to study about the same topic. 6.2 Recommendations Although this research has taken vital steps to identify the factors that influence buying behaviour, it also has certain limitations. Firstly, the limitation of the data prevents further exploration of the study. There was an age limit and only 171 respondents have been participated in this study. The respondents were almost homogenous for age types because there were between 18 to 24 years old and represent early adulthood only. Different stages of life cycles of respondents would yield different results. Therefore, future researchers are suggested to increase the sample size variety especially in respondents age to decrease the error for the purpose of the generalizing result to a wider population. They can do comparison among early, middle and late adolescents in regards to buying behaviour. Secondly, future researchers may further scope to duplicate the study in different environment and different geographical locations. Different environment played a significant factor that influence respondents behaviour specifically workplace, supermarkets and shopping complexes or malls. Working individuals could behave in a different manner compared with this sample. Besides, the individuals who do not have occupation such as housewife and retired person may also behave differently because the understanding and experience of respondents towards the questions might influence their answers. Since this study was conducted in Kongunadu Arts and Science College, Coimbatore, it could not represent other people in urban or rural areas where the quality of life is different. Thirdly, future researchers are suggested to use interview technique in doing research especially at the place here transactions happen. This will enable the researchers obtain an accurate information based on the respondents fresh memory; Last but not least, this research has only examines four promotional tools that influence buying behaviour. Future researchers are suggested to determine other promotional tools such as rebates, sweeptakes, in pack premiums and so forth. Besides, the study can also specify in category of products or services to have more focus information. However, for more meaningful findings the different promotional tools can be investigated together rather than separately so that the interactions among them can be better understand. As a result, it can assist marketers and consumers understand other promotional tools that may influence the buying behaviour. 6.3 Conclusions Sales promotions play an important role in the marketing programs of marketers and retailers. A large percentage of marketers sales are made on promotion. This situation is becoming apparently when the financial crisis and economic downtime happened in 2008. The marketers are rather use variety of promotional tools to offers consumers an extra inducement to buy their products than advertising in classic media. It is supported by the research from Curzon (2009) who stated that sales promotions are not only effective in attaining short-term sales as they are also more cost-effective compared to other integrated marketing communications tools such as advertising. In conclusion, the consumers attitude towards different promotional tools on buying behaviour is favourable. It showed that sales promotion tools are supplementary or complementary to existing business as an additional marketing strategy. This research demonstrated that consumers buying behaviour were motivated by multiple types of factors, including socio-demography, promotional tools such as price discounts, coupons, free samples and buy-one-get-one-free. In addition, the framework provides new insights into the understanding of how students respond to various promotional tools offered by marketers and the impacts on their buying behaviour, which may be essential for marketers in order to utilize accurate marketing strategies to promote products.